The petrol car
states are now caught in a squeeze and will probably be forced to extend output caps into 2018 to stop prices falling. Shale fracking in the US is now so efficient, and rebounding so fast, that it may cap oil prices in a range of US$45 to US$55 until the end of the decade. By then the historic window will be closing.
Experts will argue over Seba’s claims. His broad point is that multiple technological trends are combining in a perfect storm. The simplicity of the EV model is breath-taking. The Tesla S has 18 moving parts, one hundred times fewer than a combustion engine car. “Maintenance is essentially zero. That is why Tesla is offering infinite-mile warranties. You can drive it to the moon and back and they will still warranty it,” Seba says.
Self- driving “vehicles on demand” will be running at much higher levels of daily use than today’s cars and will last for 500,000 to 1 million miles each.
It has long been known that EVs are four times more efficient than petrol or diesel cars. What changes the equation is the advent of EV models with the acceleration and performance of a Lamborghini costing five or 10 times less to buy, and at least 10 times less to run.
“The electric drive-train is so much more powerful. The gasoline and diesel cars cannot possibly compete,” Seba says. The parallel is what happened to film cameras — and to Kodak — once digital rivals hit the market. It was swift and brutal. “You can’t compete with zero marginal costs,” he says.
The effect is not confined to cars. Trucks will switch in tandem. Over 70 per cent of US haulage routes are already within battery range, and batteries are getting better each year.
EVs will increase US electricity demand by 18 per cent but that does not imply the need for more capacity. They will draw power at times of peak supply and release it during peak demand. They are themselves a storage reservoir, helping to smooth the effects of intermittent solar and wind, and to absorb excess base load from power plants.
Mark Carney, the Governor of the Bank of England and chairman of Basel’s Financial Stability Board, has repeatedly warned that fossil energy companies are booking assets that can never be burned under the Paris climate agreement.
He pointed out last year that it took only a small shift in global demand for coal to bankrupt three of the four largest coal-mining companies. Other seemingly entrenched sectors could be just as vulnerable.
He warned that, if we do not prepare in time, the energy revolution could precipitate a global financial crisis.
The crunch may be coming even sooner than he thought. The Basel Board may have to add the car industry to the mix. There will be losers. Whole countries will spin into crisis. The world’s geopolitical order will be reshaped almost overnight. But humanity as a whole should enjoy an enormous welfare gain.
— The Daily Telegraph